Eight Local Working Group Meetings

Improving the performance of District Heating Systems in Central and Eastern Europe

Pilot projects

Report on local working groups

Republic of Serbia

Horizon 2020 (H2020-EE-2017-PPI) Project N°784966

This project received co-funding from the German Federal Ministry of Economic Cooperation and Development.

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PROJECT INFORMATION

Lead partner for the deliverable North-West Croatia Regional Energy Agency (REGEA)

Document type report

Dissemination level public

Date of submission September 15, 2020

Author(s) Milica Mladenović, Goran Živković (VINČA)

Stefanie Schaedlich, GIZ Reviewer(s) Magdalena Sperl, GIZ Marko Čavar, REGEA

List of Abbreviations

AT Austria CEE Central and Eastern Europe CoM Covenant of Mayors for Climate and Energy CZ Czech Republic DisComEx Dissemination, Communication and Exploitation DG Directorate-General of the European Commission DHS District Heating System EBRD European Bank for Reconstruction and Development EU European Union GHG Greenhouse Gas HR Croatia KPI Key Performance Indicator LV Latvia LWG Local Working Groups NGO Non-Governmental Organisation RES Renewable Energy Source(s) SI Slovenia SRB Serbia UKR Ukraine WP Work Package

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Summary of the project

The project “KeepWarm - Improving the performance of district heating systems in Eastern Europe” is funded under the EU Horizon 2020 programme. Its objective is to accelerate cost-effective investments in the modernisation of District Heating Systems (DHS) in Central and Eastern Europe (CEE). KeepWarm is most active in seven countries: Austria (AT), Croatia (HR), Czech Republic (CZ), Latvia (LV), Serbia (SRB), Slovenia (SI) and Ukraine (UKR). The project focuses on this region, and these particular countries, because in most cases DHSs are frequently still inefficient and for the most part overly reliant on fossil fuels (especially gas, coal or oil).

The aim of this initiative, launched in April 2018, is to modernise DHSs around the whole region in a more sustainable manner. By improving system operations and promoting a switch to less-polluting sources, like renewable energy sources (RES), KeepWarm will contribute to reducing greenhouse gas (GHG) emissions. The eleven project partners strive to ensure that best practices for environmentally-friendlier heating and cooling will be taken up across Europe, replicating KeepWarm’s approach in other countries and regions, even beyond the end of the project in September 2020.

Project objectives

KeepWarm’s specific objectives are:

• At least 450 relevant stakeholders with increased capacities on technical, organisational, financial and managerial aspects – includes 150 DHS operators; • At least 95 DHS operators are able to develop business plans and to identify the most suitable financial model for modernisation of their own DHS; • At least 23 business plans for the modernisation of DHSs have been developed and sources for investment have been identified; • DHS network retrofitting is addressed in at least 10 local energy plans and 7 regional or national strategies or plans; • At least 23,300 relevant stakeholders (directly) and 125,000 (indirectly) reached across Europe in order to replicate the project outputs in primary and secondary target regions and ensure the project’s impact; • Support EU policies and initiatives, such as the Covenant of Mayors for Climate and Energy (CoM) and DecarbHeat, by exploiting key lessons from KeepWarm activities and pilots to disseminate best practices across Europe.

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KeepWarm consortium partners

LOGO PARTNER NAME SHORT COUNTRY

Deutsche Gesellschaft für internationale Zusammenarbeit GIZ Germany (GIZ) GmBH

University of Zagreb Faculty of Mechanical Engineering and Naval UNIZAG FSB Croatia

Architecture

Landeskammer für Land- und LWK Austria Fortwirtschaft in Steiermark

Regionalna Energetska Agencija REGEA Croatia Sjeverozapadne Hrvatske

Jožef Stefan Institute Energy JSI Slovenia Efficiency Centre

ICLEI European Secretariat GmbH ICLEI Europe Germany

Teplarenske Sdruzeni Česke TSCR Czech Republic Republiky

Biedriba Zemgales Regionala ZREA Latvia Energetikas Agentura

Zavod Energetska Agencija za KSSENA Slovenia Savinjsko Salesko in Korosko

LLC KT-Energy Consulting KT-Energy Ukraine

Institut za Nuklearne Nauke Vinca VINCA Serbia

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Content

List of Abbreviations ...... 2 Summary of the project ...... 3 Project objectives ...... 3 KeepWarm consortium partners ...... 4 Content ...... 5 Executive summary ...... 6 Introduction ...... 9 Local working group – meeting 1 ...... 10 Local working group – meeting 2 ...... 13 Local working group – meeting 3 ...... 14 Local working group – meeting 4 ...... 18 Local working group – meeting 5 ...... 22 Local working group - meeting 6...... 25 Local working group - meeting 7...... 27 Local working group - meeting 8...... 30 Future activities of local working groups ...... 34

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Executive summary

The switch from a fossil fuel and inefficient DH system to clean and renewable alternatives with low level of losses is a challenging task. Moreover, other competitive heating solutions in heating sector make it difficult for other heating alternatives, such as DH to compete. Besides DH systems often were not able to provide appropriate value of their services from technical, environmental, societal as well as economic perspective. In other words, DH systems are often in a difficult position due to many reasons. As a result, they often lack of ambitious plans and performing relevant activities such as development of feasibility studies, complicated public procurement procedures, evaluation of RES potential, successfully negotiation with both existing and future end-consumers, identification and application to both local/regional/national and EU funds (lack of investment strategy). On the other hand, they often lack work force and capacity to achieve ambitious plans due to lack of financial funds or know-how. To foster modernization of above-mentioned DHSs, the KeepWarm project focuses on modernization of pilot DH systems in 7 partner countries (Austria, Croatia, Czech Republic, Latvia, Slovenia, Serbia and Ukraine).

Project partners committed to provide support to DHSs representatives throughout an interdisciplinary approach with the aim of achieving investments developed in previous activities of projects such as feasibility studies, business plans and selection of pilot DHSs. After identification of current state and barriers which hinder successful investments, the KeepWarm consortium organized local working groups in each country with the aim of providing tailor-made assistance to remove barriers. The goal of the local working groups was to include all relevant stakeholders, which can be identified through the stakeholder analysis, to provide input for business plan development and feedback on future retrofitting plans as well as on barrier removal for DHS. This report is created as country-by-country overview of organized local working group meetings with the aim of presenting systematic and continuous activities of KeepWarm partners toward DHSs representatives and other stakeholders with the aim of achieving investments. In addition to this, each project partner used a tailor-made KeepWarm approach which is a result of previously taken activities such as feasibility studies, business plans and selection of DHSs to be retrofitted.

In case of Serbia, project partner VINČA organized eight meetings on different topics with respective DHSs representatives, on local (hereinafter meetings 3, 4, 6 & 7) , regional (hereinafter meeting 8) and national level (hereinafter meetings 1, 2 & 5). which were attended by 90 participants. In each initial meeting with DHSs (meetings 3, 4, 6 & 7), feasibility studies created through the project have been presented, as well as discussed in terms of modifications and further steps. Meetings taken afterwards have been a result of a continuous collaboration between Serbian partner and DHSs representatives towards achieving investments. Main goals of the meetings 1, 2 & 5 of the established national working group was to lobby for biomass and the application of bioenergy in general.

DHS Nova Varoš: On January 29, 2020, the councillors of the Novi Varoš Parliament voted on the Decision to give up the loan for the construction of the central city biomass heating plant, considering that the loan is currently too expensive for "Energija Zlatar NV" and the

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municipality. Instead, they apply to the Public Investment Management Office (PIMO) for a grant to build a biomass plant for heating public buildings - 3 schools and municipal administration building (of smaller capacity than that provided by the business plan for district heating of the whole city developed within the KeepWarm). Funds from PIMO have been withdrawn for now due to the current epidemiological situation. Therefore, for now, all investments have been stopped. No change is expected before the end of October.

DHS Šabac: Due to large investments and financial situation, the Šabac heating plant has refocused its efforts to obtain the investment for a 10 MW biomass boiler with investments in improving the energy efficiency of DHS and buildings (on DHS grid), as well as focusing on smaller biomass boilers (≤0,5 MW) in suburban areas. The investment for the construction of a 500kW wood-fired boiler with the construction of a 700 m network and 5 heat substations is financed from EU funds through the cross-border cooperation project - Interreg BIOSOL, is expected to be realized by March 2021.

DHS Priboj: Investment has started, the project for the construction permit is in progress, soon, the beginning of construction works is expected in the autumn.

DHS Bajina Bašta: PIMO approved funds for the construction of a biomass heating plant on March 6, when the municipality of Bajina Bašta announced a tender for the design, procurement, delivery and installation of equipment for the reconstruction of the existing coal boiler room for work on wood chips and construction of a new heating pipeline and heating substations. Unfortunately, due to the epidemiological situation, those funds were withdrawn, and the tender was suspended. The staff of the heating plant and the municipality expects that in October (6 months after the previous approval of funds, according to the law, it cannot be earlier), PIMO will approve the funds again, when the tender will be announced again. So, the start of investments will certainly not start before the end of October.

It should be mentioned that, due to the pandemic situation (COVID-19), most of planned and already organized meeting have been cancelled and adjusted to virtual platforms which definitively hindered implementation of scenarios and reduced a number of total meetings taken. Following table presents basic information:

LOCAL WORKING GROUP MEETING 1 Pilot: Nova Varoš, Priboj, Šabac, Bajina Bašta Number of stakeholders: 15 Main topics: Intro to LWG, bioenergy, organization of capacity building programme, future activities LOCAL WORKING GROUP MEETING 2 Pilot: Nova Varoš, Priboj, Šabac, Bajina Bašta Number of stakeholders: 11 Main topics: Bioenergy, organization of workshop, organization of next meeting LOCAL WORKING GROUP MEETING 3

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Pilot: Priboj Number of stakeholders: 5 Main topics: Feasibility studies, intro to LWG, twinning programme and inspire events LOCAL WORKING GROUP MEETING 4 Pilot: Nova Varoš Number of stakeholders: 5 Main topics: Feasibility studies, intro to LWG, twinning programme and inspire events LOCAL WORKING GROUP MEETING 5 Pilot: Nova Varoš, Priboj, Šabac, Bajina Bašta Number of stakeholders: 17 Main topics: Bioenergy – technical and legislative aspects, Official document release, future activities LOCAL WORKING GROUP MEETING 6 Pilot: Šabac Number of stakeholders: 6 Main topics: Feasibility studies, intro to LWG, twinning programme and inspire events LOCAL WORKING GROUP MEETING 7 Pilot: Bajina Bašta Number of stakeholders: 9 Main topics: Feasibility studies, intro to LWG, twinning programme and inspire events LOCAL WORKING GROUP MEETING 8 Pilot: Nova Varoš, Priboj, Šabac, Bajina Bašta Number of stakeholders: 22 Main topics: Introduction of Zlatibor region, Bioenergy – public authorities’ activities, future activities, status of investments

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Introduction

As defined in the Grant Agreement, this deliverable N°4.2 Report on local working groups is closely tight with the work package 4’s objective – achieve at least 15 DHS investments in at least 5 countries, using suitable technical and financial approaches (developed in Work Package 3), which will lead to increased efficiency and RES use. Throughout the task 4.2 Support to DH operators/owners to remove barriers and achieve investments, it is stated in the Grant Agreement that the main objectives are to provide a tailor-made support, remove barriers and achieve above mentioned investments.

The specific topics and focus of the conducted meetings were defined based on the needs of each DHS operator/owner and related stakeholder which is defined throughout the Task 4.1 Selection of DHS for retrofitting, investments and working groups. Working groups are established for each DHS to be retrofitted and include at least representatives of DHS operators/owners, local government and end consumers (and possible other key stakeholders if needed). The local working groups are responsible for the implementation and monitoring of the DHS retrofits. KeepWarm partner were mainly facilitator, discussion leader and triggering reflections and provide support in planned actions

In addition, the working groups will consider results of the Work Package 3 in order to provide an adequate support to secure investments:

• Supporting choices in the optimal financial approach and business model (combination of public and private capital, financing schemes like on-bill financing and similar)

• Support and guidance in preparation and application for potential grants (for example, EU structural funds through the Integrated Territorial Investment mechanism, and others)

• Supporting negotiations with customers (joint meetings with project partners as facilitators)

• Support on specific technical issues (in addition to the ones analyzed in WP3)

• Support with legal issues (e.g. unclear ownership/responsibilities of heating substations

• Exchange with twins – and including lessons learnt

• Conclusions for future scenarios – long-term orientation

The outcome of Task 4.2 is the realization of 15 actual investments in DHS retrofits. Therefore, this document presents steps taken towards the above-mentioned goal through the activity of local working groups in terms of identification of problems, discussions, exchange of knowledge, remove of barriers and proposing relevant solutions.

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Local working group – meeting 1 General Info

SHORT INFORMATION ABOUT THE LOCAL WORKING GROUP MEETING Country Belgrade

Pilot city name Priboj, Nova Varoš, Šabac, Bajina Bašta

Date April 12, 2019

Location Hotel Zepter Belgrade, Terazije 10

1 participant from Business association of Serbia heating plants (TOPS) 2 participants from SERBIO 2 participants from VINČA Institute of Nuclear Sciences 1 participant from Permanent Conference of Cities and Municipalities (SKGO) Number of participants / 1 participant from Biogas association Stakeholders groups 2 participants from Regional Development Agency Zlatibor (RRAZ) 1 participant- Deputy Mayor of Priboj and president of Regional Biomass Working Group of the Zlatibor district 3 participants from Ambero/VPC 2 participants from GIZ DKTI project "Development of a Sustainable Bioenergy Market in Serbia"

Intro to LWG Bioenergy Topic(s) Organization of capacity building programme Future activities

Minutes by Milica Mladenović

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Agenda

Minutes and main Conclusions

One of the main goals of the listed meetings of the established national working group was to lobby for biomass and the application of bioenergy in general. A national lobbying group for biomass does not exist (only for biogas), hence lobbying on national level for bioenergy should be improved.

The Bioenergy Task Force is comprised of five partner organizations, in addition to the VINČA Institute, these are the National Association for Biomass SERBIO, the Standing Conference of Towns and Municipalities, the Association of Biogas Serbia, the Business Association of Serbian Heat Plants, with the support of the Zlatibor Area Working Group on Biomass and Energy Efficiency for Forests, the Regional Development Agencies Zlatibor and the Regional Development Agency of Eastern Serbia - RARIS.

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In this way, VINČA wants to influence at national level that the modernization of DHS and the use of RES will be included in strategic energy plans, which was presented to the LWG participants.

At the first initial meeting the discussions were conducted in accordance with the agenda, with an emphasis on:

• Ideas for capacity development activities: mostly everyone agreed on important topics for capacity building that are: characterization of fuel quality, project management, training of trainers, certification of wood chips and wood chips producers, financial management on local level.

• Giving recommendations as well as education to people to use the biomass in an optimal way is important.

• Study tour topic: good practice examples in Serbia - Experiences of Priboj could be beneficial to municipalities which are deciding on whether to use biomass. In these regards, meetings could be organized with representatives of municipalities where biomass projects are being implemented. Priboj can share its experiences (like 1.8 MW boiler plant financed by PIMO) and help in quicker implementation of projects in some municipalities, or these experiences can help the municipalities to decide on using biomass.

• Strategic positioning is of utmost importance.

• Problem with the legislation: 99% of the Energy Law refers to electricity, 0.7% to natural gas, while heat is very rarely considered.

• Review realistic biomass availability taking into account wood that is already used in rural household heating environments and is not available for DHS.

• Different approaches: municipality by municipality (referring to potential), wider approach (lobbying is important).

• Functioning of the Taskforce/Working Group - less formal taskforce is preferred.

• Discussion on logistics for the following meetings of the taskforce/working group - meetings on quarterly basis (all participants agreed).

• Next meeting in June can be hosted by SKGO.

Twinning activities

This meeting did not include any activities focused on twinning.

Monitor of retrofit implementation steps

This meeting did not include any activities on retrofit implementation steps.

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Local working group – meeting 2 General Info

SHORT INFORMATION ABOUT THE LOCAL WORKING GROUP MEETING Country Serbia

Pilot city name Priboj, Nova Varoš, Šabac, Bajina Bašta Date October 3, 2019

premises of the Standing Conference of Municipalities and Cities, Location SCTM (in Serbian SKGO), Makedonska 22/VIII, Belgrade

1 participant- Deputy Mayor of Priboj and president of Working Group on Biomass and Energy Efficiency of Zlatibor Region 1 participant- Working Group on Biomass and Energy Efficiency of Zlatibor Region, City of Uzice 1 participant from Permanent Conference of Cities and Municipalities (SKGO) Number of participants 1 participant from Association Biogas Serbia 2 participants from Zlatibor Regional Development Agency 1 participant from SERBIO 2 participants from VINČA Institute of Nuclear Sciences 1 participant from Ambero/VPC 1 participant from GIZ DKTI project "Development of a Sustainable Bioenergy Market in Serbia"

Bioenergy, Organization of workshop, Organization of next Topic(s) meeting

Minutes by Milica Mladenović

Agenda

There is no official document which can serve as an agenda. Minutes and main Conclusions

At the second meeting of the established national working group (see meeting 1) work continued on defining the model of joint action of partner organizations, active in the topic of biomass and biogas, at the national and regional level, in Serbia. The discussion was conducted as a continuation of the discussion from the previous meeting, where one of the main tasks were the formalization of the group itself and overview of future activities.

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It was concluded that it would be effective to organize a multi-day workshop for partner organizations, in order to better define and shape the mentioned aspects of joint action:

• location: somewhere outside the country, but in a closer environment (for convenience)

• term: mid-November

• logistics: Ambero (assisted by RDA Zlatibor)

• Leadership: external engagement of facilitators for workshop work (with the assistance of RBA Zlatibor

Twinning activities

This meeting did not include any activities focused on twinning.

Monitor of retrofit implementation steps

This meeting did not include any activities on retrofit implementation steps.

Local working group – meeting 3 General Info

SHORT INFORMATION ABOUT THE LOCAL WORKING GROUP MEETING Country Serbia

Pilot city name Priboj

Date November 19, 2019

Location Public company “Toplana Priboj”, 12 januar br.5, Priboj

2 participants from municipality Priboj (deputy mayor and energy Number of participants / manager) Stakeholders groups 1participant from DHS Priboj 2 participants from VINČA Institute of Nuclear Sciences

Feasibility studies Topic(s) Intro to LWG Twinning programme and inspire events

Minutes by Milica Mladenović

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Agenda

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Minutes and main Conclusions

One of the main goals of this meeting of the established local working group was to present the feasibility studies, done by VINČA, and to align the data with the current status of the pilot DHS discussed. Representatives of the pilot plant and their municipality provided appropriate suggestions on how to improve the scenarios presented. These adjustments are mainly related to the investment costs of certain technical elements as well as to the implementation timeframe for realization on DHS modernization. In this way, the best scenario was selected (for the Priboj heating plant it is Scenario 3: Construction of a new 8.0 MW boiler, extended operation including night shift and integration of grid) and all the parameters needed to create a business plan were precisely defined.

Furthermore, the local working group representatives were briefed on the main objectives of the working group - to support achievement of investments, coordination of “Twinning” programme, production of additional studies and negotiations with future customers.

The local working group consist of representatives from VINČA Institute (Goran Živković and Borislav Grubor), DHS management staff (Dalibor Šljivić) and public authorities/ municipal administration (Saša Vasilić, deputy mayor, and Marko Janjušević, energy manager), which will be contacted about necessary bureaucracy regarding necessary urban planning permits (public buildings – schools, health centres, kindergartens etc.).

In this meeting, participants were also briefed on the twin activities that will take place in the coming year/ next project period.

VINČA presented the twin partner (Ptuj, Slovenai) which will be contacted soon through project partners from Slovenia. Furthermore, LWG representatives have been discussed about documents which will be shared with twin partners. This was done to prepare both sides on data collection and document creation.

Twinning activities

At the last Steering Committee Meeting in Ljubljana 09.2019, twin cities have been identified, the twin for Priboj is:

Ptuj (SLO)

Information about the twin DHS

Grid: 5,990 m

• Customers: In total, the DHS Ptuj has 42 customers. The main customers are 21 residential buildings with total 2,126 individual customers connected to the system. The remaining customers are schools and office buildings. They have heat supply contracts without time limit obligations.

• Connected load: 24.8 MW, whereby 15.4 MW come from residential buildings.

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• Boiler output: 26,930 kW

• Type of DHS: hot-water

• Current fuel: Natural gas, heat oil as fossil backup

• Potential renewables nearby: biomass- wood chips

In accordance to the project and agreements between project partners, dates of visits to twin cities will be announced.

In the meeting, participants were also informed about the Inspiring Event that will take place in the coming year- April 1st and 2nd, in Belgrade (see meeting 3).

The Inspire Event objective is to reach out to relevant stakeholders through European and national events, attract interest for the project’s results and stimulate motivation for the uptake of KeepWarm services.

Monitor of retrofit implementation steps

The following activity has been successfully implemented in this local working group meeting:

• The most favourable scenario from the feasibility studies was selected, and that is already above stated scenario 3: Construction of a new 8.0 MW boiler, extended operation including night shift and integration of grid,

• and the parameters for developing business plans were specified, which primarily refers to the cost of individual technical elements of the heating plant and network and defining the time frame and steps for the realization of the investment.

Moreover, in this introductory meeting, it was agreed to hold a one-day meeting of local working groups composed of representatives of all four DHS pilots and representatives of their municipalities, in Belgrade at the beginning of next year, by February 2020 at the latest, in order to define more precisely the next steps in finding potential investors. This meeting was held with the representatives of Priboj and Bajina Basta as a meeting under number 8 in this document.

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Local working group – meeting 4 General Info

SHORT INFORMATION ABOUT THE LOCAL WORKING GROUP MEETING Country Serbia

Pilot city name Nova Varoš Date November 20, 2019

Public company “ENERGIJA ZLATAR NV”, Karađorđeva 114 , Location 31320 Nova Varoš

1 participant from municipality Nova Varoš Number of participants 2 participants from DHS Priboj 2 participants from VINČA Institute of Nuclear Sciences

Feasibility studies Topic(s) Intro to LWG Twinning programme and inspire events

Minutes by Milica Mladenović

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Agenda

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Minutes and main Conclusions

One of the main goals of this meeting of the established local working group was to present the feasibility studies, done by VINČA, and to align the data with the current status of the pilot DHS discussed. Representatives of the pilot plant and their municipality provided appropriate suggestions on how to improve the scenarios presented. These adjustments mainly related to the investment costs of certain technical elements as well as the implementation timeframe for realization on DHS modernization. In this way, the best scenario was selected (for pilot DHS Nova Varoš it is Scenario 3: Construction of a new 3.0 MW boiler on wood chips with, extended operation including night shift and integration of grid) and all the parameters needed to create a business plan were precisely defined.

The local working group representatives were briefed on the main objectives of the working groups - to support achievement of investments, coordination of “Twinning” programme, production of additional studies and negotiations with future customers.

LWG consist of representatives from VINČA Institute, DHS management staff and public authorities/ municipal administration, which will be contacted about necessary bureaucracy regarding necessary urban planning permits (public buildings – schools, health centres, kindergartens…).

In this series of meetings, participants were briefed on the twin activities that will take place in the coming year/ next project period.

VINČA presented twin partners (Zaprešić) which will be contacted soon through project partners from Croatia. Furthermore, LWG representatives have been discussed about documents which will be shared with twin partners. This was done to prepare both sides on data collection and document creation.

Twinning activities

At the last Steering Committee Meeting in Ljubljana 09.2019, twin cities have been identified, the twin for Nova Varoš is:

Zaprešić (HR)

Information about the twin DHS

• Grid: 2 368 m

• Customers: 2 372

• Connected load: 15 172 kW

• Boiler output: 20 360 kW (19 boilers)

• Type of DHS: hot-water

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• Current fuel: Natural gas and extra light fuel oil

• Potential renewables nearby: solar thermal energy

In accordance to the project and agreements between project partners, dates of visits to twin cities will be announced.

In the meeting, participants were informed about the Inspiring Event that will take place in the coming year, on April 1st and 2nd, in Belgrade (see meeting 3).

Monitor of retrofit implementation steps

The following activity has been successfully implemented in this local working group meeting:

• the most favourable scenario from the feasibility studies was selected and that is scenario 3: Construction of a new 3.0 MW boiler on wood chips with, extended operation including night shift and integration of grid

• and the parameters for developing business plans were specified which refers to the supplementing the documentation regarding specifying the price of individual technical elements, as well as the time frame for the implementation of activities defined by the business model.

In this introductory meeting, it was also agreed among the participants to hold a one-day meeting of local working groups in Belgrade at the beginning of next year, by February 2020 at the latest, in order to define more precisely the next steps in finding potential investors. Representatives of Nova Varoš are expected to be present at the meeting number 8 (in this document) held in Požega, but unfortunately they were not present due to busy schedule.

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Local working group – meeting 5 General Info

SHORT INFORMATION ABOUT THE NATIONAL WORKING GROUP MEETING Country Serbia

Pilot city name Priboj, Nova Varoš, Šabac, Bajina Bašta

Date November 21-23, 2019

Location Stanišići, Republic of Bosnia and Herzegovina

2 participants from Working Group on Biomass and Energy Efficiency of Zlatibor Region 1 participant from National Biomass Association of Serbio 2 participants from Regional Development Agency of Eastern Serbia "RARIS" Number of participants / 2 participants from Vinca Institute of Nuclear Sciences Stakeholder groups 2 participants from Zlatibor Regional Development Agency 2 participants from Biogas 1 participant from GIZ DKTI project "Development of a sustainable bioenergy market in Serbia" 5 participants from Ambero Consulting

Bioenergy – technical and legislative aspects Topic(s) Official document release Future activities

Minutes by Milica Mladenović

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Agenda

Minutes and main Conclusions

As a result of the conclusion from the previous meeting of the established national working group (see meetings 1 & 2), the third gathering of five partner organizations (in addition to the VINČA Institute, these are the National Association for Biomass SERBIO, the Standing Conference of Towns and Municipalities, the Association of Biogas Serbia, the Business Association of Serbian Heating Plants, with the support of the Working Group on Biomass and Energy Efficiency from Zlatibor Region, the Regional Development Agencies Zlatibor and the Regional Development Agency of Eastern Serbia - RARIS.) was realized, which was attended by their representatives from VINČA Institute, Working Group on Biomass and Energy Efficiency of Zlatibor Region, National Biomass Association of Serbio, Regional Development Agency of Eastern Serbia "RARIS", Zlatibor Regional Development Agency, Biogas, as well as representatives of the program that provides technical support to this process (Ambero/VPC & GIZ DKTI project "Development of a Sustainable Bioenergy Market in Serbia"). Pursuant to the agreement from previous meetings (see meetings 1 & 2), a multi-day workshop was held to discuss various aspects of joint action, including

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topics, goals, key actors and dynamics of actions. Special emphasis in the three-day work was placed on public advocacy, which was recognized as the basic mandate of the newly formed group. This gathering of partner organizations was joined by representatives of the Regional Agency for Development of Eastern Serbia "RARIS", as well as consultants hired by GIZ/ Ambero, during various project activities throughout Serbia. The facilitation of the three-day education was conducted by external engagement of facilitators for workshop work (with the assistance of RBA Zlatibor) During the mentioned three of national working group meetings (1,2 & 5), through presentations and joint discussions, several conclusions crystallized:

1. The group of partner organizations participating in national working group meetings is called the "Bioenergy Task Force", in order to avoid different interpretations of the term Working Group, which is already "reserved" in the official terminology of the state apparatus.

2. The following was chosen as the main topic of the Task Force's activities: Increasing the share of renewable energy sources in thermal energy production in Serbia.

The activities of the Task Force can be structured into the following basic subgroups:

• Making an alliance and defining the model of joint action of partner organizations

• Identification of common topics and goals in the field of biomass and biogas

• Establishing dialogue with decision makers at national, regional and local levels on identified topics

• Improving support to the bioenergy sector (analysis of existing and development of new support schemes)

• Raising awareness of the importance of bioenergy and organization of promotional activities

• Improving the capacity of partner organizations

Cooperation between partner organizations, at the bilateral/trilateral level, depending on the topic or geographical area is a priority in achieving specific objectives.

GIZ/ Ambero supported this specific process, in the function of a "catalyst of ideas".

As follow-up on this meeting, in May 2020, the document PUBLIC ADVOCACY STRATEGY, Bioenergy Task Force, within the DKTI program "Development of a sustainable bioenergy market in Serbia" was prepared and will be published on a platform which will be developed in the near future.

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Local working group - meeting 6 General Info

SHORT INFORMATION ABOUT THE LOCAL WORKING GROUP MEETING Country Serbia

Pilot city name Šabac

Date November 29, 2019

Location Public company “Toplana Šabac”, 12 januar br.5, Priboj

Number of participants / 4 participants from DHS Šabac Stakeholder groups 2 participants from VINČA Institute of Nuclear Sciences

Intro to LWG Topic(s) Feasibility studies Twinning programme and Inspire events

Minutes by Milica Mladenović

Agenda

There is no written agenda of this meeting. Minutes and main Conclusions

One of the main goals of this meeting was to present the feasibility studies to Šabac, done by VINČA, and to align the data with the current status of the pilot DHS discussed. Representatives of the pilot plant and their municipality provided appropriate suggestions on how to improve the scenarios presented. These adjustments mainly related to the investment costs of certain technical elements as well as the implementation timeframe for realization on DHS modernization. In this way, the best scenarios were selected and that is Scenario 2 from a feasibility study: Construction of a new 10 MW boiler on wood chips, extended operation to include night shift and all the parameters needed to create a business plan were precisely defined.

The local working group representatives ( DHS management and technical staff) were briefed on the main objectives of the working group These are to support achievements of investments, coordination of “Twinning” programme, production of additional studies and negotiations with future customers.

Similar to the local working groups from Priboj, Nova Varoš and Bajina Bašta, LWG consist of representatives from VINČA Institute, DHS management and technical staff.

In this meeting, participants were briefed on the twin activities that will take place in the coming year/ next project period.

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VINČA presented the twin partners - Velika Gorica/ Croatia, Zaprešić/ Croatia and Ptuj/ Slovenia - of the Serbian DHSs which will be contacted soon. Furthermore, LWG representatives have been discussed about documents which will be shared with the twin partners. This was done to prepare both - data collection and document creation.

Twinning activities

At the last Steering Committee Meeting in Ljubljana 09.2019, twin cities have been identified. The twin city of Šabac is:

Velika Gorica (HR)

Information about the twin DHS

• Grid: 9 836 m

• Customers: 5 902

• Connected load: 46 275 kW

• Boiler output: 69 612 kW (33 boilers)

• Type of DHS: hot-water

• Current fuel: Natural gas and extra light fuel oil

• Potential renewables nearby: solar thermal energy

In accordance to the project and agreements between project partners, dates of visits to twin cities will be announced.

In the meeting, participants were also informed about the Inspiring Event that will take place in the coming year, on April 1st and 2nd, in Belgrade (see meeting 3)

Monitor of retrofit implementation steps

The following activity has been successfully implemented in the local working group meeting:

• the most favourable scenario from the feasibility study was selected (construction of a new 10 MW boiler on wood chips with extended operation to include night shift) and

• the parameters for developing business plans were specified (investment costs of certain technical elements as well as the implementation timeframe for investment realization).

In this introductory meeting, it was also agreed to hold a one-day meeting of local working groups in Belgrade at the beginning of next year, by February at the latest, in order to define more precisely the next steps in finding potential investors.

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Local working group - meeting 7 General Info

SHORT INFORMATION ABOUT THE LOCAL WORKING GROUP MEETING Country Serbia

Pilot city name Bajina Bašta

Date December 2, 2019

Public company ”BB TERM”, Kneza Milana Obrenovića 44, Bajina Location Bašta

Number of participants / 7 participants from DHS Bajina Bašta Stakeholder groups 2 participants from VINČA Institute of Nuclear Sciences

Intro to LWG Topic(s) Feasibility studies Twinning programme and inspire events

Minutes by Milica Mladenović

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Agenda

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Minutes and main Conclusions

One of the main goals of the meeting of the established local working group was to present the feasibility studies, done by VINČA, and to align the data with the current status of the pilot DHS Bajina Bašta. Representatives of the pilot plant provided appropriate suggestions on how to improve the scenarios presented. These adjustments mainly related to the investment costs of certain technical elements as well as the implementation timeframe for realization on DHS modernization investment. In this way, the best scenario was selected ( scenario 2 from feasibility studies: construction of two new 3.0 MW boilers on wood chips) and all the parameters needed to create a business plan were precisely defined (individual prices of technical elements and time frame for the realization of individual investment phases).

Similar to meetings 3,4 and 6, LWG consist of representatives from VINČA Institute (Borislav Grubor and Milica Mladenović) and DHS management and tehnical staff (Velimir Radovanović, Predrag Anđić, Leontije Leontijević, Slađana Jpkić Stanić, Gordana Spasojević and Ljiljana Milošević).

Twinning activities

In accordance to the project and agreements between project partners, dates of visits to twin cities will be announced.

In this series of meetings, participants were briefed on the Inspiring event that will take place in the coming year- April 1st and 2nd, in Belgrade (see meeting 3).

Monitor of retrofit implementation steps

The following activity has been successfully implemented in the local working group meeting:

• the most favourable scenario from the feasibility study was selected and that is construction of two new 3.0 MW boilers on wood chips

• and the parameters for developing business plans were specified (prices of technical items and grantogram)

In this introductory meeting, it was agreed to hold a one-day meeting of local working groups in Belgrade at the beginning of next year, by February at the latest, in order to define more precisely the next steps in finding potential investors. This meeting was held with the representatives of Priboj and Bajina Basta as a meeting of regional working group (RWG) under number 8 in this document.

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Local working group - meeting 8 General Info

SHORT INFORMATION ABOUT THE LOCAL WORKING GROUP MEETING Country Serbia

Pilot city name Priboj, Bajina Bašta, Nova Varoš

Date February 28, 2020

Location small hall of the Municipal Assembly of Požega

12 participants from Working group for biomass and energy efficiency of Zlatibor area Number of participants / 3 participants from Zlatibor Regional Development Agency Stakeholder groups 4 participants from municipalities 3 representatives of KeepWarm project partner Vinča Institute of Nuclear Sciences

Introduction of Zlatibor region, Bioenergy – public authorities’ Topic(s) activities, Future activities. Status of investments

Minutes by Milica Mladenović

Agenda

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The VINČA Institute attended the meeting as a guest in order to present the KeepWarm project, and realized project activities so far, as well as to acquaint those present with current plans and future activities. Furthermore, the business plans for modernization of pilot heating plants within the project - Priboj, Nova Varos and Bajina Basta - were presented.

• Current information from the Zlatibor region

Cross-section of activities by municipalities (in the sectors of bioenergy and energy efficiency)

• Review of implemented activities September 2019 - January 2020.

• Information related to the submission of the project concept to the EUKI 2020 competition.

Discussion

• Proposals for new WG members

Participation of WG members in thematically related events in the country

Next steps

• Presentations of the KeepWarm project

Activities so far, realization and plans

Presentation of business plans for modernization of pilot heating plants within the project - Priboj, Nova Varos and Bajina Basta

Possibility of implementation in action plans at local and regional level, as well as learning about twin activities and upcoming Inspire event Minutes and main Conclusions

Energy efficiency, biomass as the main energy potential of the region, sustainable management and networking of all elements of the production cycle of good energy - were the topics of the regional working group, RWG, meeting.

Within the first session (of the agenda), members were given the opportunity to present the activities of their municipalities within the topics of biomass and energy efficiency. Only activities concerning municipalities that are also participants in the KeepWarm project, are listed in subchapter Monitor of retrofit implementation steps.

Representative of RRAZ and moderator of the meeting introduced the participants to the activities in which the members of the regional working group, RWG took part, to a greater or lesser extent, in the period after the last formal gathering. Some of the next steps were presented:

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ACTIVITY DESCRIPTION DATE Elaboration of the concept in the form of a full March 2020 EUKI application application Eventual submission of the full application to the Jun 2020 competition Presentation of business models of association of March 2020 Elaboration and private forest owners at the regional level definition of Return visit of REAS Koprivnica March 2020 institutional models Presentation of the business model for formalizing the April 2020 work of the WG Visit to the city of Sabac and the first energy March 2020 cooperative in Serbia Membership Development of a website to promote the region's March 2020 capacity energy transition building International conference in Belgrade, within the April 2020 KeepWarm project

Representative of RRAZ and moderator of the meeting briefly presented the epilogue of the work of the secretariat of the RWG and GIZ/ Ambero, on the preparation and submission of the concept of the project proposal, to the competition "European Climate Initiative / EUKI" 2020. Within the regular programme of the Assembly, where the most important points were briefly presented (in the bioenergy and energy efficiency sectors), the KeepWarm project was presented with three presentations related to: previous activities, implementation and plans presentation of business plans for the modernisation of pilot plants within the project - Priboj, Nova Varoš and Bajina Bašta possibility of implementation in Keep Warm action plans at local and regional level, as well as learning about twin activities and upcoming Inspire event. Twinning activities

This meeting did not include any activities focused on twinning.

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Monitor of retrofit implementation steps

Priboj

This municipality received 15 million dinars (127.590 €) from the Republic Fund for EE, for the project of energy rehabilitation of the building of the House of Culture in Old Priboj, including interventions on the equipment for heating regulation. Currently, a tender has been announced for a contractor for the construction of an 8 MW boiler room for heating residential buildings. It is expected that the works will start in the summer 2020. The municipality is also planning to replace the 1.5 MW plant that is currently heating the General Hospital and the Health Center, with a plant that will consume wood chips for heating and cooling these facilities, but also for electricity production. The municipality also plans to allocate significant funds from the municipal budget to subsidize individual users who would put fossil fuels out of use. Currently, the municipality is financing with 10 million dinars (85060 €), the reconstruction of several buildings of collective housing, which includes certain energy efficiency measures. The possibility of making these measures more serious and binding is considered, in order to achieve the greatest possible effects in the context of savings and reduction of air pollution.

The municipality of Priboj, known for the successful implementation of the transition to the use of thermal energy from biomass in public buildings, has become a member of the network "Mayor's Charter", which brings together over seven and a half thousand local governments from around the world. Joining this movement, Priboj expressed readiness to reduce greenhouse gas emissions by over 40 percent by 2030 in the municipality, using renewable energy sources, primarily biomass, and other energy efficiency measures, and to adopt an Action Plan for climate and sustainable energy covering the period up to 2030.

A tender has been announced for the contractor to develop a municipal SECAP document (in accordance with the obligations arising from the membership of this municipality in the Covenant of Mayors), while the development of a 3-year Energy Efficiency Program is entrusted to UNDP consultants (with the necessary input from the municipal energy manager).

Bajina Bašta

The location permit for the wood chip boiler room, with a capacity of 2 x 3 MW, whose estimated value is 436 million dinars (3.713.535 €), is currently being completed. Public procurement for the construction of this plant is expected to be announced in March 2020. At the competition of the Budget Fund for EE, the school in Rastište received 8 million dinars (68.138 €) for a complete reconstruction, while maintaining the existing wood heating. During 2019, the municipality managed to replace 65% of public lighting lamps with LED bulbs (on its entire territory) and is currently monitoring the results, which are primarily related to reducing electricity consumption.

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Future activities of local working groups

As the project period comes to its end, there will be additional meetings of local working groups organized in order to continue above-mentioned activities in terms of achieving investments. Most of those meetings will take place virtually due to new working environment influenced by the COVID-19.

The Vinča Institute is in constant virtual contact with the representatives of the heating plants Bajina Bašta, Priboj, Nova Varoš and Šabac in order to monitor the current situation regarding to investments realization.The mentioned representatives of the heating plants were forwarded the document Action plans for retrofitting of District Heating Systems - Serbia, in order to facilitate the preparation of such documents at the local and regional level.

Within the Bioenergy Task Force, Vinča will work with other partners to raise awareness of the need to increase the share of renewable energy sources in heat production in Serbia. Through comments and suggestions, Vinča helped in the realization of the drafting of two documents of this working group, which are Public Advocacy Strategy and Analysis of the Bioenergy Sector in Serbia (with support measures). The development of a web platform, on which these documents will be posted, is in progress.

On September 10, VIRTUAL KEEPWARM STUDY VISITS to pilot heating plants participating in twinning activities were realized. This event was realized in coordination with the holders of the KeepWarm project from Croatia, Slovenia and Serbia. VIRTUAL KEEPWARM STUDIES were visited by more than 30 participants. District heating systems in all three countries were presented, followed by paired heating plants:

Velika Gorica (HR) & Sabac (SRB),

Zaprešić (HR) & Nova Varos (SRB),

Ptuj (SLO) & Priboj (SRB) and

Samobor (HR) & Velenje (SLO).

The presentations were followed by fruitful discussions and exchange of experiences, which lasted almost four hours. The heating plants that participated were given the opportunity to express their opinion on the need for organization more such meetings, in order to further and deeper exchange of views.

As part of the Inspire Event planned in October (physical event), the participation of investors and government representatives is planned, in addition to the heating plants and local and regional WGs.

In addition to the above, Vinča plans to provide services in the characterization of fuels used in heating plants through the work of its own accredited Testing Laboratory. It will also be offered to heating plants to participate in the implementation of projects of the relevant Ministry of Science, in terms of monitoring combustion products, primarily in plants that use biomass.

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